Brazil Business Confidence

Brazil: Businesses slightly less confident in February

February 25, 2014

Business confidence was down slightly in February according to the Getulio Vargas Foundation (FGV, Fundacao Getulio Vargas). The index decreased a seasonally-adjusted 1.0% over the previous month and now rests at 98.5 points, down from the 99.5 points tallied in January. The index is resting just below the 100-point threshold that signals that businesses are more optimistic than pessimistic. The index fell below the threshold for the first time in four years in July 2013 and has remained just below it ever since.

Firms' more negative assessment of current business conditions was the main driver behind the decline. Their outlook on business in the coming months also decreased.

LatinFocus Consensus Forecast participants see fixed investment expanding 2.9% in 2014, which is down 0.2 percentage points from last month's forecast. For 2015, panelists also expect fixed investment to expand 2.9%.

Author:Carl Kelly, Economist

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At its 6 December meeting, the Central Bank’s Monetary Policy Committee (COPOM, Comité de Politica Monetaria) decided to cut the benchmark SELIC interest rate by 50 basis points, a smaller cut than at its previous meeting.